Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK, Eurozone, Japanese and Chinese March Services Purchasing Managers’ Index (PMI) readings, US trade data and eurozone unemployment.
In the US, March retail sales surged 27.7% y/y and 9.8% m/m, both ahead of forecasts. March industrial production expanded 1.0% y/y and 1.4% m/m. Exports and imports rose 9.1% y/y and 6.9% y/y, respectively in March. Initial jobless claims beat expectations in the week ending April 10, declining to a new pandemic low of 576,000. March headline and core (excluding food and energy) consumer prices rose 2.6% y/y and 1.6% y/y—both more than expected. Notably, the vast majority of financial outlets reasonably explained this jump in inflation gauges came from a math quirk known as the “base effect” and doesn't reflect a fundamental pickup in inflation in our view. For more, please see our 4/13/2021 commentary, “The Mathflation Jump.”
In the UK, February manufacturing and industrial production declined 4.2% y/y and 3.5% y/y, respectively, both less than forecast. In the eurozone, February industrial production decreased 1.0% m/m, and 1.6% y/y. February retail sales fell 2.9% y/y but increased 3.0% m/m—both better than expected.
In Japan, preliminary March money supply (M2) expanded 9.5% y/y, modestly lower than forecasted. February retail sales fell 1.5% y/y, in line with estimates. In China, Q1 2021 GDP rose 18.3% y/y, modestly ahead of analyst expectations. March money supply (M1) grew 7.1% y/y, missing expectations. March exports rose 30.6% y/y, modestly missing expectations, while imports surged 38.1% y/y, significantly beating consensus estimates. March retail sales increased 34.2% y/y, beating forecasts.
The Week Ahead:
The US, UK, eurozone and Japan release April preliminary Purchasing Managers’ Index (PMI) readings. The US reports the March Leading Economic Index (LEI). The UK releases March retail sales figures. The eurozone and UK announce March inflation data. Japan releases February industrial production and March trade data. The European Central Bank meets to set monetary policy.
Source for all data cited is FactSet. This update constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Global equities are represented by the MSCI World Index. The MSCI World Index measures the performance of selected stocks in 23 developed countries and is presented net of dividend withholding taxes and uses the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.